Negative Interest Rates Explained

This video was made possible by our Patreon community! ❤️
See new videos early, participate in exclusive Q&As, and more!
➡️

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

In July of 2009, The Central Bank of Sweden lowered its overnight deposit rate to negative 0.25% – effectively charging the country's retail banks to pay it to look after its money.

At the turn of the millennia, negative interest rates were somewhat of an economic fantasy: the same way that light-speed travel is a fantasy for theoretical physicists. Economists had speculated about what negative interest rates would mean, but nobody actually ever expected this phenomenon to exist in the real world.

Today, negative interest rates dominate the market for sovereign bonds and are the staple of many central banks. But how in the world does this make sense? Who in their right mind would pay someone to take their money? ... all this and more in today's episode!

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

📚 Want to learn more about interest rates? We recommend reading "Interest Rate Markets: A Practical Approach to Fixed Income", by Siddhartha Jha
👉 (as an Amazon Associate, we earn from qualifying purchases)

Enjoyed the video? Comment below! 💬
⭑ Subscribe to Economics Explained 👉
⭑ Enjoyed? Hit the like button! 👍

Q&A Streams on EEII (2nd channel) →

✉️ Business Enquiries → EconomicsExplained@ibg.yt

Follow EE on social media:
Twitter 🐦 →
Facebook →
Instagram →
Discord →

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

#CentralBank #Sweden #Economics

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

Sources & Citations -

Buiter, W.H., and Panigirtzoglou, N., 2003. Overcoming the zero bound on nominal interest rates with negative interest on currency: Gesell's solution. The economic journal

Ilgmann, C., and Menner, M., 2011. Negative nominal interest rates: history and current proposals. International Economics and Economic Policy

Rognlie, M., 2016. What lower bound? Monetary policy with negative interest rates

Bech, M.L., and Malkhozov, A., 2016. How have central banks implemented negative policy rates?. BIS Quarterly Review

Scheiber, T., Silgoner, M., and Stern, C., 2016. The development of bank profitability in Denmark, Sweden and Switzerland during a period of ultra-low and negative interest rates

Danthine, J.P., 2018. Negative interest rates in Switzerland: what have we learned? Pacific Economic Review

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

EE Fan Exclusive Offer:

Sign-up for Acorns! 👉 (after registration, Acorns will deposit $5 in your account to help you get started with investing!)

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

ECONOMICS EXPLAINED IS MADE POSSIBLE BY OUR PATREON COMMUNITY 👊🙏
Support EE by becoming a Patron today! 👉

The video you’re watching right now would not exist without the monthly support provided by our generous Patrons:

Morgon Goranson, Andy Potanin, Wicked Pilates, Tadeáš Ursíny, Logan, Angus Clydesdale, Michael G Harding, Hamad AL-Thani, Conrad Reuter, Tom Szuszai, Ryan Katz, Jack Doe, Igor Bazarny, Ronnie Henriksen, Irsal Mashhor, LT Marshall, Zara Armani, Bharath Chandra Sudheer, Dalton Flanagan, Andrew Harrison, Hispanidad, Michael Tan, Michael A. Dunn, Alex Gogan, Mariana Velasque, Bejomi, Sugga Daddy, Matthew Collinge, Kamar, Kekomod, Edward Flores, Brent Bohlken, Bobby Trusardi, Bryan Alvarez, EmptyMachine, Snuggle Boo Boo ThD, Christmas

negative interest rates explained,the economics of negative interest rates,how do interest rates work,how do interest rates affect the economy,how do interest rates go below zero,how do interest rates go below 0,how do interest rates go negative,how do negative interest rates occur,how do interest rates impact the economy,interest rates negative,negative interest rates,interest rates explained,interest rates economics explained,economics explained,